Gibbons Law Alert

Gibbons Law Alert

Category: Development/Redevelopment

Gibbons Advises Leading Car Rental Companies on $500 Million Project at Newark Airport — Industry’s First P3-Structured Consolidated Rent-A-Car Facility

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Posted in Development/Redevelopment

On May 15, 2019

Gibbons P.C. served as lead counsel to Avis Budget Group, The Hertz Corporation, Enterprise Holdings Inc., and Advantage Inc., operators of national rental car brands Budget, Alamo, Thrifty, Payless, Zipcar, and National, among others, in connection with the industry’s first public-private partnership (P3) financing structure for the development of a $500 million Consolidated Rent-A-Car facility as part of the redevelopment of Terminal A at Newark Liberty International Airport. Gibbons led the corporate and real estate negotiations on behalf of the national car companies in connection with their long-term concessionaire agreement and real estate leases. Such agreements provide the credit support for the $500 million P3 financial arrangements. Click here to view the full press release issued by Conrac Solutions.

Opportunity Zone Update – IRS Releases Second Set of Proposed Regulations

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Posted in Development/Redevelopment / State Legislation / State Legislative and Budget Matters

On April 30, 2019

On April 17, 2019, the Internal Revenue Service released the second set of Qualified Opportunity Zone (“QOZ”) proposed regulations (the “New Regulations”). The New Regulations address multiple issues relating to the structuring and operation of qualified opportunity zone funds (“QOFs”) and provide clarity on areas that include: Meeting the original use test for purchased tangible property Safe harbors for leased tangible property to qualify as QOZ business property Related party rules for leased tangible property and tangible personal property Investment vs. active business use of QOZ land Safe harbors to meet the 50% gross income test for the active conduct of a QOZ business Inclusion events for otherwise deferred capital gains Definitions for the term “substantially all” used in several statutory provisions Special elections when QOF partnerships and S corporations dispose of property after 10 years QOF reinvestment of the proceeds from the distribution, sale, or disposition of QOZ property Application of the 90% asset test to newly contributed QOF assets The New Regulations provide answers to many unresolved questions and present needed definitions where uncertainties were impeding investment into QOZs, particularly with respect to QOZ businesses. Our new article discusses many of the details.

New York Appeals Court Decision Highlights the Risks of Not Filing Decisions and Not Holding Duly Noticed Public Hearings

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Posted in Development/Redevelopment

On April 4, 2019

A recent decision by New York’s Appellate Division, Second Department, serves as a reminder of the importance of promptly filing administrative determinations, holding required duly noticed public hearings, and the consequences of failing to do so. In Corrales v. Zoning Board of Appeals of the Village of Dobbs Ferry, Livingston Development Group in November 2012 submitted an application for the development of twelve condominiums. The Building Department forwarded the application to the Planning Board, which conducted a public hearing after which it recommended approval subject to certain conditions. The Village Board of Trustees, which retained site plan approval authority, granted site plan approval conditioned on, among other things, the applicant obtaining approval from the Architectural and Historic Review Board (the “AHRB”). Thereafter, the applicant applied to the AHRB, which denied its application. The applicant appealed the denial to the Zoning Board of Appeals (“ZBA”). While that appeal was pending, neighbors – one of whom did not receive notice of the Planning Board’s earlier public hearing – asserted that the proposed condominium use was not permitted in the zoning district. The neighbors’ attorney also raised this issue at a subsequent meeting of the AHRB, during which the assistant building inspector gave the opinion that the proposed use complied with applicable zoning regulations. The neighbors, viewing the...

Recap: IRS Convenes Public Hearing on Proposed Regulations for Opportunity Zones

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Posted in Development/Redevelopment

On February 25, 2019

Jason J. Redd, a Director in the Gibbons Government & Regulatory Affairs Department attended an overflowing public hearing on February 14 convened by the Internal Revenue Service for the purpose of obtaining input from stakeholders concerning the initial proposed regulations for Opportunity Zones (OZ) issued in October. The IRS is reviewing comments on the first round of proposed rules and is expected to issue the next round of proposed regulations in March, with the potential for final regulations to be issued in late spring. Witnesses at the packed hearing included state cabinet officials, as well as representatives from state economic development groups, small businesses, community reinvestment coalitions, investment funds, and technology and planning organizations, among others. Testimony focused on ensuring that program regulations maximize investment and economic growth by generating new development, capital, and jobs in the distressed communities where OZs are located. There was also a clear call, by all in attendance, for clarity and flexibility in the next round of rules. Suggestions included: (i) modifying the rules to provide more flexibility to investors when exiting Qualified Opportunity Fund (QOF) investments, which is currently limited to a sale of the QOF investment itself; (ii) minimizing sourcing and location rules for OZ business income; and (iii) allowing QOFs to reinvest interim gains within a reasonable...

NJ Appellate Division Announces Evidentiary Standards for Condemnations “Necessary” for a Redevelopment Project

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Posted in Development/Redevelopment

On January 18, 2019

At what point is a piece of property “necessary” for a redevelopment project? On January 7, 2019, the New Jersey Appellate Division published a decision in Borough of Glassboro v. Jack Grossman, Matthew Roche, and Dan Desilvio, — N.J. Super. — (App. Div. 2019) (slip op. at 2) that – for the first time – clarifies the phrase “necessary for the redevelopment project” as stated in the Local Redevelopment and Housing Law (LRHL) at N.J.S.A. 40A:12A-8(c). The three-judge panel addressed the question of whether a showing of necessity is required by a condemning authority beyond the designation of the area as one in need of redevelopment, and, what showing it must make in order to condemn a parcel of land located with a redevelopment area. Existing case law required the taking to be “reasonably necessary,” but had never clarified what standards should be used to evaluate how necessary a given property might be to a given redevelopment project. This decision now requires that when a landowner within a redevelopment area contests the necessity of a condemnation, the condemning authority must articulate a definitive need to acquire the parcel for an identified redevelopment project. In Grossman, the defendants owned or were purchasing a parcel located within a redevelopment area in the Borough of Glassboro. The area...

Gibbons to Exhibit at ICSC New York Deal Making Conference on Wednesday and Thursday

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Posted in Development/Redevelopment / Environmental and Green Issues / Real Estate / Transactional Real Estate and Leasing

On December 3, 2018

The Gibbons Real Property Department will once again exhibit at the International Council of Shopping Centers (ICSC) New York Deal Making Conference at the Jacob K. Javits Convention Center on December 5-6. Stop by our booth, #2411, and meet with some of the Department’s attorneys who will be attending (Click here to view the Deal Making floor plan). Show hours are Wednesday, December 5, from 8:00 am to 5:00 pm, and Thursday, December 6, from 8:00 am to 3:00 pm. We look forward to seeing you there!

“Housing is Health Care”: New Jersey HMFA Launches Program for Supportive Housing Partnership with Hospitals

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Posted in Development/Redevelopment

On November 8, 2018

The New Jersey Housing and Mortgage Finance Agency (HMFA), in collaboration with the New Jersey Hospital Association, has announced a pilot subsidy program to promote investment by hospitals throughout New Jersey in affordable and supportive housing. The program was previously endorsed by the New Jersey Hospital Association’s Board of Trustees. Following a number of recent studies highlighting the interconnection between stable, safe, and affordable housing and maintaining a higher quality of life, HMFA created a partnership program for New Jersey’s hospitals and affordable housing developers to try and fill a notable void in supportive housing. Hospitals are encouraged to work with developers to target housing for special needs residents or users of frequent emergency room services. HMFA anticipates the projects would consist of 60-70 units and can include mixed-use space for doctors’ offices, clinics, or other community uses. Approximately ten of the units would be set aside for low-income households (50 percent of gross median income), and the remainder would be restricted to households of moderate income (80 percent of gross median income). The program, currently funded with $12 million, seeks to match funding contributions from hospitals up to $4 million to fund three or four projects in New Jersey. The program will include the four percent low-income housing tax credit as well. HMFA is seeking...

EPA Provides Guidance to BFPPs Regarding Their Ability to Receive Reimbursement from EPA Superfund Special Accounts

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Posted in Development/Redevelopment / Environmental and Green Issues

On September 27, 2018

One underused provision in the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) makes Environmental Protection Agency (EPA) Superfund Special Accounts available for reimbursement to Bona Fide Prospective Purchasers (BFPPs). This provision has received greater scrutiny by EPA following the creation of the Superfund Task Force (“Task Force”) in May 2017, and BFPPs should carefully consider the potential benefits that Superfund Special Accounts might provide. The Task Force includes senior representatives from different EPA Regional Offices with responsibility for Superfund policy and enforcement. EPA created the Task Force to streamline and strengthen the Superfund program. In July 2017, the Task Force issued a report containing five goals and 42 recommendations. The full report is available here. Goal number two in the report is to reinvigorate responsible party cleanup and reuse of Superfund sites. One of the specific recommendations relating to this goal is to maximize the use of special accounts to facilitate site cleanup and/or redevelopment. EPA has begun to implement this recommendation with the issuance of a March 27, 2018 memorandum to its Regional Offices entitled: “Guidance on Disbursement of Funds from EPA Special Accounts to Entities Performing CERCLA Response Actions.” The full memorandum is available here. On July 23, 2018, EPA issued an update to its Task Force report in which it stated...

NYSDEC Adopts Update to SEQR Regulations

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Posted in Development/Redevelopment / Environmental and Green Issues

On August 2, 2018

The New York State Department of Environmental Conservation (“DEC”) announced on June 28, 2018 that it had adopted a rulemaking package directed at updating its regulations relating to the State Environmental Quality Review (“SEQR”). The updates – DEC’s first to its SEQR regulations in more than two decades – are the product of an effort that began in February 2017 with the DEC’s filing of an initial notice and, following a series of public comment periods and subsequent revisions, culminated with its publication of the Final Generic Environmental Impact Statement (“FGEIS”) and revised text of the regulations. As revised, the regulations become effective on January 1, 2019 and apply to all actions for which a determination of significance has not been made by January 1, 2019. For projects that receive a determination of significance made prior to January 1, 2019, the existing SEQR regulations (which originally took effect in 1996) will continue to apply. Once effective, the revised regulations could have a significant impact on SEQR’s applicability to future development projects. The new regulations contemplate a number of mechanical changes to the environmental review process itself, including mandatory scoping of environmental impact statements, changes to the required content of environmental impact statements (“EIS”), as well as new requirements relating to the preparation and filing environmental impact...

An Application for Development Must Include All Checklist Items for Protection of “Time of Application” Rule to Apply, New Jersey Supreme Court Says

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Posted in Development/Redevelopment

On June 20, 2018

The New Jersey Supreme Court ruled today, in a unanimous opinion in a case of first impression captioned Dunbar Homes, Inc. v. Zoning Board of Adjustment of the Township of Franklin, et al., that to receive the protection of the “time of application” rule, an application must comply with the definition of “application for development” in the Municipal Land Use Law (“MLUL”), meaning that it must include all of the items required by the submission checklist which the municipality has adopted by ordinance. This case constitutes the first time the Supreme Court has interpreted the “time of application” rule, and its decision will impact the review of development applications throughout the state. The MLUL’s “time of application” rule provides that the ordinances and regulations in effect “on the date of submission of an application for development” govern review of that application. This reversed the longstanding “time of decision” rule whereby municipalities could change the zoning regulations at any time prior to the approval of an application for development, even where the change was enacted during a public hearing process specifically for the purpose of derailing a pending application. Under the “time of application” rule, the date upon which “an application for development” was submitted for review is key to determining what ordinances apply to it...

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